Neil Leyden Logo

Tuesday, October 10, 2006

Google buys You Tube

This is without doubt one of the most significant moves in the New Medium sphere in quite a while. Pictured left is YouTube founders Chad Hurley, 29, left, and Steven Chen, 27. (Photograph: Tony Avelar/AP).

(Below text is taken from Guardian Unlimited)

The founders of the video website YouTube last night accepted a $1.65bn (£880m) takeover offer from Google for their 20-month-old venture, which has a big online following but has yet to make money.

Chad Hurley, 29, and Steve Chen, 27, who set up the site in a California garage, said they were attracted by the prospect of adding Google's cutting-edge search technology to enable users to pinpoint clips more accurately. Mr Hurley said: "Google has demonstrated how great ideas can change the way people find and use information." Under the deal, YouTube will remain a separately branded entity. Google will pay for the company entirely in shares.

Mr Hurley predicted that Google's financial resources would help to build a business model able to attract media companies keen to publicise licensed clips and to avoid a possible mountain of copyright litigation. "We'll have the resources to build systems so that copyright holders can benefit from the site," he said.

Around the world, people watch videos on YouTube more than 100m times daily. About 65,000 clips are uploaded on to the site every 24 hours and the monitoring agency Hitwise says YouTube accounts for 60% of all videos viewed on the net.

Google's chairman, Eric Schmidt, said YouTube's founders bore remarkable similarities to the search engine's creators, Larry Page and Sergey Brin.

"Chad and Steve remind me, when I first came to Google, of what Larry and Sergey were like," he said, describing them as remarkable entrepreneurs. "What tipped us over was not the business relationship here, but their vision," he added, describing the tie-up as "the next stage in the evolution of the internet", with communication moving from words to video streaming.
Google's shares rose by 2% on the technology-dominated stockmarket Nasdaq yesterday. The search company fought off interest from a host of rivals to secure the takeover.

However, not everybody was convinced of the logic of the takeover. Critics of YouTube maintain that the site is full of unauthorised clips from music videos, films and television programmes. Some analysts have suggested that the only reason it has not attracted many lawsuits to date is that everybody knows it has little money to pay out.

Josh Bernoff, of the American firm Forrester Research, said: "I still need to hear how the copyright situation needs to be solved. In the absence of a solution to that, Google has just opened itself to a huge lawsuit. This is pretty risky unless they have a solution to that problem."
YouTube is yet to develop a way to attract significant revenue. One possibility is that users could be required to sit through brief advertisements before viewing certain clips. Mr Hurley was non-committal on this, merely saying the companies would be exploring "lots of options".
The deal makes YouTube's founding duo into two of America's wealthiest businessmen. It will also mean a windfall for Sequoia Capital, a venture capital firm which provided $11.5m of seed capital to YouTube.

In the hours before last night's deal, there was a sign that YouTube's legitimacy was growing among big media players. Vivendi's Universal Music, Sony BMG and the television network CBS all announced they were licensing music videos and video clips to YouTube in exchange for a share of advertising revenue.

The financial terms of the deals were not disclosed but they represented a significant coup for the upstart website. Just a month ago, Universal's chief executive, Doug Morris, accused YouTube of violating copyright laws and claimed it owed millions of dollars to record labels. He took a more amicable line yesterday: "YouTube is providing a new and exciting opportunity for music lovers around the world to interact with our content."

The deals will provide YouTube with everything from soap operas to NBA basketball. In a research note, stockbroker Jeffries & Company said: "The fact that YouTube was able to secure the Sony and Warner Music agreements on its own today may already imply less risk for Google."

It reflects how the growth of online, user-created video has emerged as a potential source of revenue for the sagging recording industry. "A large number of people absolutely love these sites, and so connecting artists with their fans using this viral video platform is incredibly important to us," said Thomas Hesse, Sony BMG's president of global digital business.

posted by Neil Leyden @ 10:55 a.m. 0 comments

Wednesday, October 04, 2006

What the hell is Web 2.0?


Previously I've discussed the problem of broadband uptake in Ireland and how this was linked to the general public being unaware of much of the content that is available on the web and how it is more effectively accessed through a broadband connection. Aside from the plethora of rich media content available such as on http://www.youtube.com/ or http://www.atomfilms.com/, there is also access to streamed media such as radio and television on http://www.rte.ie/ or http://www.bbc.co.uk/. But in many ways these services are just an extension of the offline broadcast media. Yes, they are searchable – and to that extent offer something of a personalised service –but in reality, they are just another vehicle of the one to many broadcast model.

Since the first TCP/IP wide area network went operational on 1 January 1983 (effectively the first iteration of the internet), the majority of sites on the web could be categorised as being nothing more then “broadcasts” or online flyers. They offer static information, updated sporadically with a limited amount of interactivity in the form of email response. Even today, this holds largely true for the majority of corporate websites – whether it is a Hotel in Killarney or the National Broadcaster. However, this is beginning to change. The Web is going through an upgrade - hence the phrase Web 2.0.

Web 2.0, a phrase coined by Tim O’Reilly of O'Reilly Media in 2004, refers to a supposed second-generation of Internet-based services — such as social networking sites, wikis, communication tools, and folksonomies — that let people collaborate and share information online in previously unavailable ways. O’Reilly was using a common software labelling term – whereby variations of software upgrades during beta would be given version numbers such as 1.0, 1.1,2.0 etc. In this sense, he was inferring that the web up until now was Web 1.0. So what features does this next generation of web sites have?

In their first conference opening talk, Tim O'Reilly and John Battelle (author of the amazingly insightful book The Search) summarized key principles they believed characterized Web 2.0 applications as follows:

- the Web as platform
- data as the driving force
- network effects created by an architecture of participation
- innovation in assembly of systems and sites composed by pulling together features from distributed, independent developers (a kind of "open source" development)
- lightweight business models enabled by content and service syndication
- the end of the software adoption cycle ("the perpetual beta")
- software above the level of a single device, leveraging the power of The Long Tail.

So what are some of the main Web 2.0 applications that are driving this new web revolution?

O'Reilly gives examples in his description of his "four plus one" levels in the hierarchy of Web 2.0-ness:[Tim O'Reilly (2006-07-17). Levels of the Game: The Hierarchy of Web 2.0 Applications. O'Reilly radar.]

Level-3 applications: These are the most "Web 2.0" and are applications which are entirely enabled by the Internet, utilising human connections and the network and growing in effectiveness the more people use them. In many ways, these are the “killer apps” which are disrupting a lot of traditional businesses and have grown exponentially due to their user-base. Examples of these are: eBay.com, craigslist.com, Wikipedia.org, del.icio.us, Skype, dodgeball, and Adsense.

Level-2 applications: According to O’Reilly these are digital applications which can operate offline but which are further enabled by going online. Examples include: Flickr, which benefits from its shared photo-database and from its community-generated tag database.

Level-1 applications: These are also available offline but which gain features online, but not perhaps to the same extent as Level 2. In a sense, the majority of their features are used in an offline capacity – much like standard software applications. Examples include: Writely (gaining group-editing capability online) and iTunes (because of its music-store portion). Level-0 applications would work as well offline. O'Reilly gave the examples of MapQuest, Yahoo! Local, and Google Maps. Mapping applications using contributions from users to advantage can rank as level 2.

Finally, there are the non-web applications like email, instant-messaging clients and the telephone.

The most notable of the Web 2.0 sites are arguably the Social Networking sites which are getting much of the press attention and remarkable valuations at the moment. The star in the firmament, thanks to Rupert Murdoch’s purchase of it for $580 million, is http://www.myspace.com/ which boasts over 100 million subscribers – and in some ways rivals many Murdoch’s own Fox Network in terms of eyeballs. But there are other contenders in the shape of http://www.facebook.com/ and http://www.bebo.com/. These sites provide users with simple tools to create blogs, upload pictures, audio and video and connect with one another in away that was never possible before on the web. What has media moguls eyeing them is the potential for advertising sales. Already, myspace.com has made back its asking price and some by selling the advertising rights to myspace.com for $900 million to Google.

Google itself has developed a number of Web 2.0 applications out of its labs – with Google Earth and Google Sketch Up, for example. Both applications would rank ask Level 0 by O’Reilly’s grading – in that they also work as offline applications- but that doesn’t mean that their online capabilities are not of immense interest. Google Sketch Up is a simple tool for creating 3D shapes – such as buildings or objects. The toolset allows a limited amount of textures and colouring giving the user a basic 3D Studio Max type application. Helpfully, you can also import other 3D files from 3D Studio Max, CAD or other 3-D packages. Thus, if you import your house plans, you can also import a range of products from Ikea and see how they look in your virtual home. When you are happy, you then can upload it to Google Earth and let people see your virtual home in geographic context. So you can see how a Web 2.0 application may well start a virtual community.

Well, in fact, that has already happened with http://www.secondlife.com/. Second Life is a 3-D virtual world entirely built and owned by its residents. Since opening to the public in 2003, it has grown explosively and today is inhabited by 342,944 people from around the globe. From the moment you enter the World you'll discover a vast digital continent, teeming with people looking to talk and entertainment of every variety.


Once you've explored a bit, you may even find a perfect parcel of land to build your house or business (import it from Google Sketch Up, if you want!). You'll also be surrounded by the Creations of your fellow residents. Because residents retain the rights to their digital creations, they can buy, sell and trade with other residents.

The Marketplace currently supports millions of US dollars in monthly transactions. This commerce is handled with the in-world currency, the Linden dollar, which can be converted to US dollars at several thriving online currency exchanges.

For many veterans of the Dot Com bubble of the late nineties, there is an element of déjà vu about all of this. Web Portals, social networks, distributed applications and virtual reality were among the many business plans scribbled on the back of napkins in Starbucks. But the difference this time around is simple: broadband. Now the bandwidth is there for always on, rich media content and that’s what makes Web 2.0 so exciting.

Here are a few more sites to whet your appetite:

http://www.odeo.com/ Odeo allows users to record and share audio using simple, browser-based tools. A browser with Flash installed, an internet connection and a microphone are all you need to start podcasting.

http://www.netvibes.com/ An aggregation tool that lets each user create a personalized page that pulls news feeds and data from web services into modular boxes. The boxes update automatically, and their display options are totally customizable.

posted by Neil Leyden @ 6:51 p.m. 0 comments

Tuesday, October 03, 2006

2025: A Future Odyssey

Predicting the future is always a source of amusement for the future generations to whom the predictions are aimed. One need only look at the flashing buttons, irritating ‘bleeping’ sounds and laughable fashion choices on the early Star Trek series to see how visions of the future are often just extended visions of the present. However, one movie that is worth seeing for its potential insights into the future is Stephen Spielberg’s Minority Report.

Aside from the central premise – based on Philip K. Dick’s dystopian view of the future whereby crimes are solved before they happen by “Pre-Cogs” who have developed Extra Sensory Perception – the overall vision of Washington D.C. in 2054 maybe frighteningly accurate going by a new report commissioned by the Pew Internet & American Life Project.
The Pew Internet & American Life Project (http://www.pewinternet.org/) produces reports that explore the impact of the Internet on families, communities, work and home, daily life, education, health care, and civic and political life in the US. It is an extremely well-funded project which “aims to be an authoritative source on the evolution of the Internet through collection of data and analysis of real-world developments as they affect the virtual world.” As such it is an extremely interesting source of information for anyone interested in digital media technology and content and where the future trends lie. In their latest study, they have surveyed 742 top technology thinkers and stakeholders and gave them a series of “future scenarios” involving the internet and digital technologies to comment on in order to get a consensus on the future. The result shows that the majority believe the internet will continue to spread in a “flattening” and improving world. There are many, though, who think major problems will accompany technology advances by 2020.

The database of responses is quite interesting:

- A low-cost global network will be thriving and creating new opportunities in a “flattening” world.

- Humans will remain in charge of technology, even as more activity is automated and “smart agents” proliferate. However, a significant 42% of survey respondents were pessimistic about humans’ ability to control the technology in the future. This significant majority agreed that dangers and dependencies will grow beyond our ability to stay in charge of technology. This was one of the major surprises in the survey.

- Virtual reality will be compelling enough to enhance worker productivity and also spawn new addiction problems.

- Tech “refuseniks” will emerge as a cultural group characterized by their choice to live off the network. Some will do this as a benign way to limit information overload, while others will commit acts of violence and terror against technology-inspired change.

- People will wittingly and unwittingly disclose more about themselves, gaining some benefits in the process even as they lose some privacy.

- English will be a universal language of global communications, but other languages will not be displaced. Indeed, many felt other languages such as Mandarin, would grow in prominence.

The most contentious issues were around the belief that governments and corporations will not necessarily embrace policies that will allow the network to spread to under-served populations; that serious social inequalities will persist and that “addiction” is an inappropriate notion to attach to people’s interest in virtual environments.

Also the experts were evenly split evenly on a central question as to whether the world will be a better place in 2020 due to the greater transparency of people and institutions afforded by the internet: 46% agreed that the benefits of greater transparency of organizations and individuals would outweigh the privacy costs and 49% disagreed.

To read the full report go to: http://www.pewinternet.org/pdfs/PIP_Future_of_Internet_2006.pdf

The survey was done in collaboration with Elon University in North Carolina who also have another predictions database which looks at the next 150 years in terms of technologies and scientific progress. Sound like the stuff of science fiction? You decide:

2010-2014: Ubiquitous RFID tied to GPS. Super supercomputers. Intelligent materials.

2015: Genetic profiling. Human cloning. Autopilot vehicles. Adaptable materials.

2016-2025: VR immersion. Ubiquitous robots. Emotion-control devices. Paint-on power.

2026-2045: Biostasis in space. Space elevator. Moon base. A "singularity" due to accelerating change.

2046-2150: Mars colony. Time travel. Brain downloading. Humans assimilated into the internet.

Courtesy of Elon University http://www.elon.edu/predictions/default.html

posted by Neil Leyden @ 6:42 p.m. 0 comments